NEW YORK (Reuters)
— Network equipment maker Cisco Systems Inc posted a
shallower-than-expected 5.5 percent drop in quarterly revenue, as
recovering demand in regions like the United States and Northern
Europe helped offset sluggish sales in emerging markets.

The company posted gross margins of 62.7 percent in its fiscal third
quarter, up from 53.3. percent in the previous quarter and above
guidance of 61 to 62 percent.

Cisco's key server business has grappled with competition from
so-called software-defined networks (SDN) , which offer software
that can run on cheap hardware. Lately it has been gaining some
traction in that battle thanks to its Nexus 9000 switches, which can
adapt to flows in workloads brought on by cloud computing, and big
data.

"It is about as solid of a quarter as you can expect," said analyst
Zeus Kerravalla at ZK research.

"Seeing gross margin get back up above 62 percent is certainly good
news for investors and should help alleviate some of the concern
that their business is being commoditized," he said.

Total U.S. product orders rose 7 percent from one year ago, with
enterprise and commercial orders rising more than 10 percent. Order
strength in northern Europe was up 4 percent year-over-year.